With the implementation of the new mining law, the government will require foreign shareholders with 100 percent of participating interest in mining companies to sell at least 20 percent of their ownership to the central government, regional government, state enterprises or domestic private companies.
The minimum ownership for local partners in all mining firms is set at 20 percent by the new regulation.
The obligation will be stipulated in one of the four law’s implementation regulations (pp) which are being deliberated by the government, director for coal and mineral utilization at the Energy and Mineral Resources Ministry, Bambang Gatot Ariyon, said in a mining discussion on Monday.
"The new mining law stipulates that foreign shareholders must divest themselves of their shares in mining companies five years after production. The implementation regulation will stipulate how big the required divestment should be. After discussions with stakeholders, we think 20 percent is the most acceptable figure for the divestment requirement," Bambang said.
He added the 20 percent divestment must be done within four years, meaning that foreign shareholders must sell five percent of their shares each year from the fifth year until the ninth year of production.